Correlation Between DFDS AS and Skjern Bank
Can any of the company-specific risk be diversified away by investing in both DFDS AS and Skjern Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DFDS AS and Skjern Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFDS AS and Skjern Bank AS, you can compare the effects of market volatilities on DFDS AS and Skjern Bank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DFDS AS with a short position of Skjern Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFDS AS and Skjern Bank.
Diversification Opportunities for DFDS AS and Skjern Bank
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DFDS and Skjern is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding DFDS AS and Skjern Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skjern Bank AS and DFDS AS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DFDS AS are associated (or correlated) with Skjern Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skjern Bank AS has no effect on the direction of DFDS AS i.e., DFDS AS and Skjern Bank go up and down completely randomly.
Pair Corralation between DFDS AS and Skjern Bank
Assuming the 90 days trading horizon DFDS AS is expected to under-perform the Skjern Bank. In addition to that, DFDS AS is 2.81 times more volatile than Skjern Bank AS. It trades about -0.27 of its total potential returns per unit of risk. Skjern Bank AS is currently generating about -0.18 per unit of volatility. If you would invest 20,900 in Skjern Bank AS on November 9, 2024 and sell it today you would lose (1,450) from holding Skjern Bank AS or give up 6.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFDS AS vs. Skjern Bank AS
Performance |
| Timeline |
| DFDS AS |
| Skjern Bank AS |
DFDS AS and Skjern Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFDS AS and Skjern Bank
The main advantage of trading using opposite DFDS AS and Skjern Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFDS AS position performs unexpectedly, Skjern Bank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Skjern Bank will offset losses from the drop in Skjern Bank's long position.| DFDS AS vs. FLSmidth Co | DFDS AS vs. NKT AS | DFDS AS vs. Dampskibsselskabet Norden AS | DFDS AS vs. GN Store Nord |
| Skjern Bank vs. Danske Andelskassers Bank | Skjern Bank vs. NTG Nordic Transport | Skjern Bank vs. Dataproces Group AS | Skjern Bank vs. Moens Bank AS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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